The Share price of independent oil and natural gas company Centennial Resource Development (NASDAQ:CDEV) has soared 270% year-to-date on an uptrend in oil prices. However, given the risk of reduced global demand owing to the resurgence of COVID-19 cases in several countries and a recent agreement among oil-producing countries to increase production, will the stock be able to maintain its momentum? Let’s find out.Independent oil producer Centennial Resource Development, Inc. (CDEV) in Denver, Colo., develops unconventional oil and natural gas reserves in the United States. The company has approximately 81,700 net acres in the liquid-rich Delaware Basin, which is in Reeves County, Tex., and Lea County, N. Mex. So far this year, the stock’s price has surged 270%, driven primarily by surging oil prices, with growing demand and reduced supply by the major oil-producing countries. CDEV’s strong foothold in the prolific, oil-producing Delaware Basin area, should position it to capitalize on the growing demand.
However, its stock is down 16.3% over the past month. This can be attributed primarily to a recent decline in oil prices because of an unexpected rise in {{8849|U.S. crcrude oil inventories.
Although investors’ increasing risk-tolerance in the energy space bodes well for the stock, concerns related to the spread of the COVID-19 Delta variant potentially threatening global demand, and OPEC’s and its allies’ plans to increase production, could cause CDEV’s stock to retreat in the near term.